Oh Goody

New unemployment claims this week are now the worst since 9/11.

Economists said the report showed the economy was being rattled by forces other than the hurricanes, adding that the numbers were at high levels even when the impact of the storms was filtered out .

"The underlying claims reflect an upward trend in unemployment," said Dana Saporta, economist at Dresdner Kleinwort Securities in New York. "The unemployment rate may settle back to 6 percent temporarily due to the teenagers going back to school from their summer job search."

But "our view is the unemployment rate will peak about 6.7 percent next year," Saporta said.

Steve Goldman, market strategist at Weeden in Greenwich, Connecticut, agreed "the economic picture is going to get worse," but the stock market's 9-percent drop last month showed investors already know that.

6.7%? That's best case government economist stuff? You'll be wishing for 6.7% next year, I think.